In addition, the International Monetary Fund (IMF) will also contribute up to 250bn euros.

The deal is designed to stop Greece's debt crisis spreading to other European countries with high budget deficits, such as Portugal and Spain.

Concerns that other countries will be engulfed in the crisis have hit the euro and global shares in recent weeks.

"Default risk has been quashed and the market reaction has been euphoric," said Jane Foley, research director at Forex.com.

But the BBC's economics editor warned that there were still some important questions to be answered, especially about the special purpose vehicle being set up to oversee the 440bn euros being provided by eurozone countries.

She said: "We don't know much about how this special vehicle would work... But if there's any lesson of the past few months it is they[eurozone countries] need to sort it out, fast.

"Investors are going to have plenty of questions about how the vehicle would work."

There were also concerns among investors that the package does nothing to address the fundamental problems of high debt levels in many European countries.

Those doubts were reflected in a mixed day of trading for the euro.

The single currency initially reacted postively, rising sharply against both the dollar and pound.

But later trading saw those early gains slowly erase, with the euro trading at $1.2783, and a pound buying 1.1626 euros after the European markets closed - near to its starting point on Monday.

UK government

The pound is still being affected by uncertainty over which parties will form the next UK government.

It fell by a cent against the dollar to $1.48650 immediately after Prime Minister Gordon Brown's announcement that talks had begun between the Liberal Democrats and Labour.

Last week's UK general election failed to give any party a clear majority.

The main concern is that a weak government will not be able to pass measures to reduce the UK's budget deficit quickly.

The pound fell sharply against the dollar on Thursday - the day of the general election - and Friday. It also fell heavily against the euro at the end of last week.

The price of oil jumped on news of the EU deal, and the Opec oil producers' cartel said there was a chance of prices rising even further.

US light, crude oil rose by $2.30 to $77.41 a barrel, while Brent crude climbed $2.58 to $81.50 a barrel, before falling back slightly.